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Cost of living now number one cause of debt for StepChange Scotland clients

20 October 2022

New data from StepChange Scotland shows inflated prices for energy, food and other essentials are driving new clients to its service. Data from July to September 2022 shows 1 in 5 clients (21%) cited the cost of living as their main reason for debt, double the 1 in 10 (10%) from January to March of this year.

StepChange Scotland also reports a rising proportion of clients with energy arrears. The third quarter of 2022 saw a 6 percentage point rise in the proportion of clients in arrears with their electricity bills, rising from 28% in Q1 to 34% in Q3. Similarly, the latest data reveals 32% of clients are in arrears on their gas bills, up from 29% in Q1. While Council Tax has historically been and remains the most prevalent household bill for StepChange Scotland’s clients to be struggling with, with 34% of those with responsibility to pay it in arrears, the proportion of clients struggling with both gas and electricity bills is now almost on a par.

In line with the long-term trend, women are over-represented among StepChange Scotland’s client base, and 62% of all clients who contacted the charity in Q3 were women. This is a slight increase from Q1, in which 60% of clients were women. 

To address the increasingly precarious financial situation for households, who are struggling to keep up with the pace of rising essential bills, StepChange Scotland is urging the Scottish and UK Governments to consider what more can be done to alleviate the burden for those on low incomes.

Sharon Bell, Head of StepChange Scotland, said:

“Across the year we’ve been concerned about the impact of the cost of living crisis on our clients’ finances, and now as feared we are seeing arrears on gas and electricity bills increasing even before we’ve reached the coldest months of the year. 

“We recommend the Scottish Government do more to protect those households already experiencing or at risk of getting into problem debt by working with public bodies to develop an effective debt management strategy. This would involve taking a more measured approach to debt enforcement, identifying customers who are struggling and offering them additional support and signposting to money advice services. These calls also apply to local authorities and their approach to Council Tax debt collection, which can be a major cause of financial hardship for households, with heavy-handed collection practices often pushing them into further difficulty. 

“With thousands of people on the lowest incomes worried about what the months ahead hold for their finances, we also need to see a commitment from the UK Government to uprate benefits in line with inflation as soon as possible. In the wake of recent turmoil, there will be a lot of worried households on low incomes wondering how they will cope without incurring ever more problem debt.”

Notes to Editors

  1. Full StepChange Scotland new client data from the first three quarters of 2022 is available on request.

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